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* * * * * THURSDAY, MAY 30, 2013 ~ VOL. CCLXI NO. 125 WSJ.com HHHH $2 .00

As Syrian Islamists Gain,It’s Rebel Against Rebel

CONTENTSBusiness Tech. ........... B5Corporate News B1-3,6Global Finance............ C3Heard on Street..... C10In the Markets........... C4Leisure & Arts............ D5

Markets Dashboard C6Opinion.................. A13-15Sports.............................. D6Style & Travel........ D1-4U.S. News................. A2-8Weather Watch........ B8World News.... A9-11,16

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Vital Signs

Americans’ incomesedged up in April after slid-ing earlier this year. Realmedian household incomewas up 0.7% from the 2013low in February of $51,120annually, as consumers re-covered from a jump intaxes. At $51,456 a year, me-dian income is slightlyabove its year-ago level of$51,139, yet far below theprerecession level of$55,253 in April 2007. A2

Median household income,seasonally adjusted,in thousands of 2013 dollars

Source: Sentier Research

$56

54

52

50

48

'09 '10 '11 '13'12’08’07

>

Swiss officials agreed tolet banks release infor-

mation on the overall hold-ings of their American cli-ents, a move expected topressure U.S. taxpayers hold-ing secret Swiss accounts todeclare them to the IRS. A1n China’s Shuanghui strucka surprise $4.7 billion pact toacquire meat producer Smith-field Foods, a deal that wouldmark China’s biggest takeoverof a U.S. company. A1, A6n Stocks fell, with high-yielding sectors lagging be-hind amid jitters over risingTreasury yields. The Dow in-dustrials declined 106.59points, or 0.7%, to 15302.80. C4n The Obama administrationis set to announce that its sig-nature consumer-mortgagemodification initiative will beextended by two years. A2n GE is evaluating potentialsuccessors to GE Capitalchief Michael A. Neal, who isexpected to step down asearly as this summer. B1nMidAmerican, the power-and-gas company owned byBuffett’s Berkshire Hathaway,will pay about $5.6 billionfor Nevada’s NV Energy. B3n Patriot Coal won ap-proval from a bankruptcyjudge to slash the pay and ben-efits of thousands of miners,retirees and dependents. B1n BHP Billiton ruled out ex-pansion of its coal-miningbusiness as it focuses on cut-ting costs amid a weakenedoutlook for the commodity. B3n Nasdaq OMX will pay$10 million to settle allegedsecurities-law violationsover problems in its han-dling of the Facebook IPO. C3n Dish Network increasedits bid for Clearwire to $4.40a share in cash, which valuesthe mobile-broadband oper-ator at about $6.3 billion. B3nMorgan Stanley has told in-vestors that its underperform-ing fixed-income unit will haveto be a lot smaller than rivals’to earn decent profits. C1n European Union authori-ties proposed a reprieve forFrance and five other coun-tries from the EU’s toughestausterity requirements. A12n France’s competition au-thority fined four chemical-distribution companies forfixing prices for productsand divvying up clients. B2n China lifted a six-year banagainst creating private air-lines, a step toward openingup one of the country’s mosttightly regulated sectors. B6n David Petraeus, the formerArmy general who resignedlast year as CIA chief, is reboot-ing his career with KKR. C1n Student-loan companySallie Mae said it plans tosplit its banking unit fromthe rest of the company. C3n Empire State Buildingstakeholders have approveda plan to sell the storiedtower as part of an IPO. C3

n Syria’s opposition failedto commit to peace talks.Leading members of the Syr-ian Opposition Coalition, afternearly a week of meetings inIstanbul, said the group hadtentatively agreed to attendthe talks in July. But they lefttheir statement deliberatelyvague as they seek interna-tional guarantees the talks willlead to Assad’s ouster. A1, A10Control of some rebel-heldterritory has split between Is-lamist extremists and rebelswho began the insurgency.nA U.S. drone strike killedthe Pakistani Taliban’s deputy,an attack that could hinder Is-lamabad’s planned bid to opentalks with the militants. A9n A Tunisian court sen-tenced 20 people to two-yearsuspended jail terms for theirpart in a deadly attack on theU.S. Embassy last year. A9nMichele Bachmann, theMinnesota Republican wholed the tea-party oppositionto Obama, said she won’t seekre-election to Congress. A4n Threatening letters sent toNew York Mayor Bloombergand the director of MayorsAgainst Illegal Guns testedpositive for the toxin ricin. A4n Obama plans to nominateJames Comey, a former Bushadministration official, to be-come the next FBI head. A4n Suicide bombers stormeda Red Cross compound in Af-ghanistan. Earlier, Afghanforces repelled an assault on agovernment compound. A9n Canada said it would im-pose additional sanctionsagainst Iran, including a banon all imports and exports. A9n French prosecutors recom-mended sending Total’s CEOto stand trial related to the oilcompany’s deals in Iran. B2n A hospital study found it ismore effective to treat all pa-tients in intensive-care unitsfor drug-resistant bacteriawithout prior testing. A7n A gene-therapy techniquein animal studies protectedagainst flu viruses that havecaused deadly pandemics. A7n A Nevada man was foundguilty of making illegal cam-paign contributions to Sen.Reid, the majority leader. A4nAmortar-training accidentin March that killed seven Ma-rines was caused by human er-ror, a military probe found. A8nA U.S. soldier charged withkilling 16 Afghan villagersagreed to plead guilty in a dealto avoid the death penalty. A8n French authorities de-tained a suspect in the stab-bing attack on a soldier andsaid he was likely motivatedby radical Islamist beliefs. A11n British police charged a22-year-old man with murder-ing U.K. soldier Lee Rigby. A12nRhode Island Gov. Chafee,a former Republican senator,will register as a Democrat. A8nDied: Rowland Schaefer, 96,founder of Claire’s Stores. B8

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What’s News–i i i i i i

RAQQA, Syria—In parts of this battle-torn coun-try, a second civil war has begun.

In the north and east bordering Turkey and Iraq,a stretch of Syria in rebel hands has split into com-peting fiefs. In some places, Islamist extremistswith agendas that extend far beyond Syria are push-ing aside the rebel battalions that started the insur-gency against Bashar al-Assad’s regime in 2011.

The resulting chaos has fragmented the rebelfight and created a playground for al Qaeda just asa U.S. debate heats up over how deeply to get in-volved.

In Raqqa, a dusty province in the country’snortheastern breadbasket, the capital city in Marchwent from pro-regime to rebel-controlled in a mat-ter of weeks. Islamists almost simultaneouslygained the upper hand, and on March 22, the blackflag of al Qaeda appeared above the main square.

The al-Nusra Front, an al Qaeda affiliate that es-pouses global Islamic rule and is labeled terroristby the U.S., now runs the largest bakery. Another Is-lamist group called Ahrar al-Sham runs buses andcontrols the local branch of the Syrian Central Bank.

Meanwhile, in towns that dot the road west toAleppo province, ethnic Kurds suspicious of new Is-lamist power brokers have put up many morecheckpoints. Clashes increasingly break out betweenKurdish factions and al-Nusra.

The Islamist takeover of Raqqa has already ush-ered in what many residents and rebels describe asSyria’s new war, between moderate anti-Assad reb-els and those bent on imposing religious gover-nance. It is a turf war some locals believe couldshape Syria’s future as profoundly as the struggleagainst the regime.

PleaseturntopageA10

China’s largest meat processorstruck a surprise $4.7 billionagreement to acquire SmithfieldFoods Inc., a deal that would

mark the biggest Chinese take-over of an American companyand underscores the Asian na-tion’s renewed determination toscoop up overseas assets.

Shuanghui International Hold-ings Ltd. agreed to pay $34 ashare for Smithfield, the world’s

largest hog farmer and pork pro-cessor. Including debt, the dealvalues the Smithfield, Va., com-pany at $7.1 billion.

People involved in the dealsaid Wednesday that the purposeof the tie-up is to export more ofSmithfield’s output to feed risingdemand in China, the world’s big-gest pork market, and not to im-port Chinese meat into the U.S.

The proposed deal marks thelatest effort by a Chinese com-pany to strike a foreign acquisi-tion aimed at securing access toresources that can drive China’seconomy—the world’s second

largest. In the past, its focus haslargely fallen on the mining andoil industries and less on food.

The country and its companieshave often been thwarted in theirquest to seal such deals—mostnotably oil company Cnooc Ltd.’seffort in 2005 to buy Unocal

Corp. for $18.5 billion—amidfears that they could jeopardizeU.S. national security and othersensitivities as China becomesthe U.S.’s chief global economicrival.

The Smithfield deal is far fromguaranteed. In addition to politi-cal concerns and fears surround-ing Chinese food safety, a rivaloffer could surface. SmithfieldChairman Joseph Luter said in aninterview that other bidders forthe company might yet emerge.“Lots of people love us,” he said.“I’ll leave it at that.”

PleaseturntopageA6

By DanaMattioli,Dana Cimilluca

and David Kesmodel

ChinaMakesBiggestU.S.PlayAsian Meat Giant Strikes $4.7 Billion Deal for Virginia’s Smithfield Foods

The U.S. government won avictory against tax cheats withoffshore bank accounts afterSwiss officials agreed Wednes-day to let banks release informa-tion on the overall holdings oftheir American clients.

The move is expected to pres-sure U.S. taxpayers holding se-cret bank accounts to declarethem to the Internal RevenueService, tax experts said. TheSwiss cabinet agreed to theframework, which will be de-cided by parliament, likely thissummer, said the Swiss FederalDepartment of Finance.

Jeffrey Neiman, a former as-sistant U.S. attorney, predictedthat Swiss banks would turnover information to help settlecases brought against them bythe U.S. “The Swiss banks arelooking to save themselves,” hesaid. “It’s no longer in their in-terests to cater to Americanswith undeclared accounts.”

The proposal doesn’t loosenprotections of specific client in-formation, such as names, ac-count numbers and balances. Re-trieval by U.S. authorities wouldremain cumbersome.

But it would make it easierfor the Justice Department andthe IRS to see where undeclaredU.S. taxpayer assets are concen-trated, said Scott Michel, an at-torney at Caplin & Drysdale inWashington. Under currentrules, such information mustpass through the Swiss govern-ment in a complicated process.

Agreement by Switzerlandcould draw a new wave of U.S.taxpayers into the IRS’s programof limited amnesty for peoplewith undeclared accounts, ex-perts said.

Pleaseturntothenextpage

BY LAURA SAUNDERSAND JOHN LETZING

Swiss BowTo PressureFor MoreBank Data

BY NOUR MALAS

WORD GAMES: Competitors at the Scripps National Spelling Bee on Wednesday used different techniques to dealwith opening day stress and to come up with the right answers, including singing a response. Finals are tonight. A8

AssociatedPress,

Getty

Images

A Hollywood Agent Helps Web’s CatsClaw Their Way to the Top

i i i

For a Percentage, He Turns Internet FameInto Cash; Grumpy Gets a Movie Deal

Some celebrities simply can-not be pleased. Just ask BenLashes, a talent manager in LosAngeles. This week, he landed amajor motion-picture deal for aclient who nine months ago wasan unknown living inMorristown, Ariz.,population 227.

When he told hisclient that she washeading to Hollywood,she looked bored. “Shehates movies,” says Mr.Lashes of his client,Grumpy Cat, a cat witha mouth puckered intoa frown whose viralphotos have ricochetedaround the Internet.

Mr. Lashes, 34 years old, is anagent for Internet cats. When anironic photograph of a feline be-comes Internet famous, Mr.Lashes contacts the pet ownerand offers to help strategize

ways to prolong, protect andmonetize. He says he operateswith this question in mind:“What would Walt Disney do ifhe created Mickey Mouse and itwent viral on YouTube?”

Grumpy Cat, the Arizonasourpuss, is Mr. Lashes’s star cli-

ent. The cat is havinga mini-Mickey mo-ment.

Last September,Bryan Bundesen, 34, acable technician fromGalion, Ohio, was visit-ing his sister Tabathain Arizona. Hesnapped a photo of hercat, a mixed breedwhose real name isTardar Sauce. (Ms.Bundesen, who works

as a waitress at a Red Lobster,says her daughter thought thecat’s fur was the color of tartarsauce, but misspelled it.) Mr.Bundesen posted the picture on

PleaseturntopageA12

Grumpy Cat

BY KATHERINE ROSMAN

Human Spell-Checkers Rack Brains in Annual Bee

Inside Deal reflects a robust

U.S.-China food chain........ A6 The Business: Should the

U.S. use its leverage?........ A6 Heard on the Street......... C10

Syrian opposition avoids committing to talks.... A10

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